How it is calculated
Variable cost per piece is taken off the price: the goods, the packaging, and the platform fee. Fixed costs are then divided by that margin. A fraction of a piece is rounded up in practice.
Pieces = Fixed costs / (Price − variable cost per piece)
Where the numbers come from
- Fixed costs per month
- Price per piece
- Variable cost per piece
Example
Fixed costs of 100 000 currency units, a price of 1 500 currency units, and variable costs of 900 currency units. The margin is 600 currency units. The break-even count is 167 pieces, rounded up from 166,67.
Questions
What goes into fixed costs?
Costs that do not grow with each sale: rent, a salary, subscriptions. A fee on an order is a variable cost.
Why does the calculator refuse to calculate?
If the price is no higher than the variable costs, every sale makes the loss larger. There is no break-even point.
Is this about unit economics?
That is its lower bound. Advertising charged per order, and returns, are not included. Take them off the price beforehand.